As you may be aware - it was announced in August 2008 – Thompson Creek Metals Company signed an agreement with US Energy Corp making them the project manager for the Mt. Emmons Project, the molybdenum mining operation proposed for Mt. Emmons. The history of mining on Mt. Emmons is long and somewhat complex, but understanding this history is key to guiding its future.

The Keystone Mine was originally developed by US Energy in the mid-1960s in an effort to revitalize the local mining economy after the Big (coal) Mine closed in the mid-1950s. The Keystone Mine produced heavy metals: copper, lead, cadmium and zinc. Amax Mining Co. bought the Keystone Mine from US Energy in the mid-1970s after it was discovered that a huge deposit of molybdenum also existed within Mt. Emmons. Amax, at the time, was the largest mining company in the world and specialized in “moly” mining. Amax subsequently merged with Cyprus Climax and later was purchased by Phelps Dodge.

The original purchase agreement required Amax to make annual royalty payments to US Energy. That contract also had a reversion clause, allowing the owner to cease the royalty payments and return the property to US Energy.

There was a mill and tailings ponds associated with the Keystone Mine. A year after Amax purchased the mine, the four tailings ponds at the mill collapsed and drained into Coal Creek. This triggered the need to reclaim the tailings and build a water treatment plant to treat the acid mine drainage coming out of the mine entrance. At Crested Butte’s insistence, Amax footed the $12 million cost of building the plant and paid the annual $1 million cost of operating the facility.

In 2003, Phelps Dodge, who assumed responsibility for the treatment plant after purchasing Cyprus Amax, decided that developing and operating a molybdenum mine in Crested Butte no longer fit into their long-term business plan and stopped making the annual royalty payments to US Energy, headquartered in Riverton, Wyoming. This triggered a civil suit and counter suit between the two companies. In March of 2005, the court determined that Phelps Dodge had the right to revert the property back to US Energy, including the responsibility for continued operation of the water treatment plant.

The transfer occurred in February 2006 at which point US Energy, a small venture capital operation, became saddled with a large liability that dwarfed their ability to operate the water treatment plant without trying to generate the revenue to pay for it. Therefore they announced their intention to define a molybdenum mining project and began to seek out a mining industry partner to assist with development costs.

In December 2006, Kobex Resources signed on as the first partner for US Energy. Kobex, a small junior resource company based out of Vancouver, BC, had the opportunity to acquire up to 65% interest in the Mt. Emmons property. Under the terms that agreement, Kobex assumed the operational costs of the water treatment facility, roughly $1 million a year. However, US Energy retained overall responsibility for the plant and mine property. The two mining companies began preparing a Plan of Operations to be submitted to the regulatory agencies, but that plan was never completed. Kobex Resources announced that it was terminating its partnership with US Energy Corp and ceasing its work on Mt. Emmons on March 31, 2008.

Following the departure of Kobex Resources, US Energy sought another partner to assist in development of the Mt. Emmons property. On August 22, 2008 US Energy and Thompson Creek Metals Company announced a new option agreement that would allow Thompson Creek Metals to become the project manager on Mt. Emmons. Under the termas of this agreement Thompson Creek obtains an option to invest in the project over time, while US Energy remains responsible for the costs of continuing to operate the existing water treatment plant. In November 2008 Thompson Creek Metals Company executives announced that they would be starting from "square one" to develop a mine plan for the Mt. Emmons Project.

High Country Citizens’ Alliance is working with other interested parties to find a way to keep the water treatment plant operating without allowing a new mine to be built. Support this effort by becoming a member of HCCA, making a donation, or offering to volunteer your time. Only a strong community voice will continue to keep a mine off Red Lady.